Assessed income ~74 times returned income deemed unreasonably high; attachment notices stayed; sealed bank accounts usable for operations

HC held that assessed income being approximately 74 times the returned income qualified as "unreasonably high pitched," warranting relief. The impugned attachment notices were directed to be kept in abeyance until the jurisdictional Commissioner disposes of the pending stay application. The petitioner may use the sealed bank accounts for day-to-day business operations and payments of statutory liabilities but is prohibited from withdrawing funds for other purposes. Writ petition disposed.

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Issues: Whether the impugned notices under section 226(3) directing attachment/encashment of the assessee's bank accounts should be kept in abeyance and the bank accounts de-sealed / permitted limited use pending disposal of the stay application in view of an assessed income pitched substantially higher than the returned income.

Analysis: The Court examined the departmental instructions and prior decision regarding stay of recovery where assessments are unreasonably high-pitched. Instruction No. 1914 of 1993 does not foreclose exceptional interference by higher authorities where an assessment is unreasonably high-pitched or genuine hardship is likely; earlier guidance (Instruction No. 96) and this Court's decision recognizing that substantially higher assessments (illustratively twice or more the returned income) may justify abeyance of recovery were considered. On the facts the assessed income is approximately 74 times the returned income and the petitioner has pending appellate proceedings and past recoveries/adjustments have occurred; therefore exceptional circumstances for interim relief are present.

Conclusion: The impugned notices are to be kept in abeyance until the jurisdictional Commissioner decides the pending stay application; the petitioner is permitted to carry on day-to-day business operations and make statutory payments from the bank accounts but shall not withdraw money for other purposes. The relief is granted in favour of the assessee.

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